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I'm currently 27 years old, in good health. I intend to stay single forever, and do not want children, so I will not have any dependents in the future. I also do not currently have any debt, besides possibly a mortgage in the future (though not in the "near" future, as real estate prices in my city are insane and I am nowhere near being able to afford a downpayment at the moment).
Just wondering -- would the money be better spent/invested elsewhere, for someone in my situation?
Edit: Just to add, I did search online for answers, but all the articles discussed were cases where the single person had plans to have children and get married in the future, which did not apply to my situation.
People who sell life insurance will try to convince everyone to buy it. But if you don't have a spouse or any dependents, you don't need it. What you could do is buy a burial policy that will pay a small amount if you die, so that your loved ones can have money to bury you/cremation/funeral, etc.
So yes, that money would be better spent elsewhere.
Thanks - yep, I have read lots about life insurance being a waste of money if you don't and never will have dependents. The only argument for purchasing it in my situation would be the burial/funeral costs if I happen to die, but I didn't want to shell out $160/month for just that! So thanks for letting me know that it's possible to purchase a separate "burial policy" that isn't a life insurance policy.
(Kinda off-topic, but this might shed some light: my controlling/abusive parents are trying to force me to purchase life insurance with them as the beneficiaries. They quoted me $160/month, which is where the above figure came from. I told them I don't want to purchase it as it would be financially detrimental to me. They are currently throwing a tantrum about it. I want to arm myself with more counter-arguments in case they persist.)
One generally purchases insurance as a financial hedge to meet responsibilities in the event of your untimely inability to pay those debts or provide support for dependents.
Absent having those responsibilities, life insurance in any form is not needed. Better to invest your money in those pursuits which benefit you now and into the future.
Even if your parents see it as an opportunity for wealth creation, it's not prudent for you to purchase life insurance. However, they can purchase a life insurance policy on you at their expense that names them the beneficiaries. Tell them it's a bargain at $160/month for them to maybe get rich if you pass away before they do ... and you'll be happy for them to have the comfort of the insurance payout in your absence.
@sunsprit: Thanks; I'll let them know they can purchase a life insurance policy on me if they want themselves as the beneficiaries. Right now, they want *me* to purchase a life insurance policy and pay for it, and name *them* as the beneficiaries, which is detrimental to me financially as I can barely afford $160/month on something unnecessary, as I'm on a very tight budget at 45k/year living in an expensive city.
Rule: Life insurance is only to cover losses that money can cover, in the event of your death.
First, it is not an investment, nor a get rich quick scheme.
If there is a survivor who will need the money to recover financial loss in the event of your death, then you buy enough life insurance to make them whole. Such as, you are a self-employed contractor whose business started on a house mortgage, your wife will need to recover your loss of future earnings, along with saving the house.
With rare exceptions, it is not for single people with no dependents who depend on you for support.
Normally, you would only buy term life, and annually change the coverage according to your needs.
Insurance companies do not create new money. If they have any money, they took yours
On your way to work next week keep a sharp eye out for unburied bodies left at the curb. You will not see any unless from a very recent wreck. Read cebuan's post again, then forget about insurance. You should have enough life insurance to cover expenses for your wife, children, and pets for five years. If you have none, you need none.
I bought a $20K whole life policy while I was in college to help a buddy who was entering the business. His explanation was that the policy payments and interest would accumulate over my life time and the policy would eventually pay for its own premiums. Did not happen. I would bet your parents got trapped by an agent into chasing after you for a whole life or universal life policy.
A.L. Williams eventually straightened me out on that fraud. His Motto was "Buy term and invest the difference" in mutual funds loaded into an IRA.
At your age $160/month should buy at least a $1.5 million policy. That would be a hell of a funeral. OTOH, a premium like that into an IRA or 401 or Roth plan would set you up to retire with $2 million in cash when you are ready. YMMV, see a tax accountant or an online calculator. Your employer may provide enough to bury you.
Tell the parents you want to be cremated by the mortuary school at the hospital where you die and forget about the flowers and coffin. Your SS death benefit would cover that. You could prepay that yourself. Funerals are for the living, let them pay for it. There's always GoFundMe.
Right now I carry a small policy which is expensive due to my age. That will lapse in a year or so and there is no need to renew it as the SO is well set. "The above is not from an accountant but I did sell life insurance and mutual funds once upon a time"
@sunsprit: Thanks; I'll let them know they can purchase a life insurance policy on me if they want themselves as the beneficiaries. Right now, they want *me* to purchase a life insurance policy and pay for it, and name *them* as the beneficiaries, which is detrimental to me financially as I can barely afford $160/month on something unnecessary, as I'm on a very tight budget at 45k/year living in an expensive city.
No, never,not, no way.
If you do get coerced into this debt name the beneficiary as the estate of yourself. IF you have no surviving dependants it goes to the oldest surviving parent anyway.
Go online and get a quote for 10 year term for $10,000. You can have a burial like a king.
Actually life insurance is the last thing to worry about if you are thinking about end of cycle issues.
You might need:
A Will to dispose of real property and designate an executor
Provision for natural death medical care
Durable Power of Attorney
Medical Power of Attorney
Provision for medical caregivers to disclose medical information
A letter directing for disposal of personal property and disposition of remains.
Then ask the parents if they have these in place and ask to see them.
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No. Life insurance is to cover the loss your dependents will suffer on your death.
You're 27, which in my opinion is very young, so you may change your mind.
But no. If you don't ever intend to leave any dependents/beneficiaries when you pass, life insurance is completely unnecessary.
If your goals in life do change, and you have dependents, you can change your life insurance plans at that point.
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